Cory Nettles, former Secretary of Commerce under a Democratic governor, gave Wisconsin’s Republican Gov. Scott Walker a B or B+ for job creation in his first six months in office.
That’s not a lot of time to move the economic needle, so I gave the governor an “incomplete” in the same TV interview. My rating on the governor’s foremost campaign promise, that of creating 250,000 new jobs by the end of his first four-year term, was based on his progress, or lack thereof, on executing “Be Bold – Wisconsin Prosperity Strategy.”
That strategy, the first-ever economic strategy for the state, was drafted last summer, prior to the election, with input from more than 300 experts from across the state’s economy. If their recommendations don’t form the basis for a gubernatorial report card on the economy, what would?
Let’s start with the positives against that standard:
- The 250,000 jobs goal requires 62,500 per year, or about 5000 jobs per month. With economic recovery winds at his back, though soft and shifty in May and June, the state is adding employment in 2011 at that pace. Wisconsin and the Midwest are recovering jobs faster than the rest of the country this year.
- The tone from the new administration is night-and-day better for decision makers in the business world. Nettles said business people are very happy with Walker’s posture that the state is open for business.
- The just-passed GOP budget contained tax credits that offset the corporate income tax for manufacturers and agri-business. Those credits address the Be Bold strategy’s call “to hug” market leading companies in the state’s exporting clusters. Manufacturers, who employ one in seven workers in Wisconsin, and farmers now feel like favored industries. That tax change sent a huge message. Earlier Walker tax breaks didn’t amount to much.
- There have been additional positive signals on the Walker team’s willingness to adopt a more pragmatic approach on regulatory action, rule making and legal liabilities.
- The disempowerment of the public unions, done in the context of balancing the state budget, quickly became the signature strategy for Walker. It played well in the private sector where jobs creation takes place, even if it has little direct impact on businesses.
The anti-union agenda consumed the capitol, so it is little wonder that there were major shortfalls against the “Be Bold” strategy. Here are some of the missed opportunities in the initial legislative session:
- While Walker and his team enabled higher benefit contributions from state and local government employees, they did not implement the proven, major reforms from the private sector that are actually reducing health care costs. The soaring costs are the real issue. Broad adoption of Wisconsin innovations on the economic side of medicine could make Wisconsin a much more competitive state.
- Gov. Walker appointed an obscure commission on government abuse, fraud and waste, and it came up with a few predictable recommendations. The bolder move would be the adoption of the lean disciplines that have transformed manufacturing and a growing number of health care providers.
- The entrepreneurial ecosystem, the source of all new jobs, was untouched. A bill to generate major new early stage investment funds died because of a fatal flaw in its structure. It will reappear in a cleaned-up form in the fall legislative session.
- Leveraging the Green Tier collaborative regulatory process to advance the economy and improve the environment in tandem was not taken up.
- The Department of Commerce was reorganized as a public-private entity, but not much impact has come out of that new structure.
- A recommendation for garnering more federal dollars, where the state has a woeful track record, was untouched.
- Engaging the great University of Wisconsin system as an engine of economic growth has sputtered as the university has endured another round of disinvestment.
All in all, some real progress was made on reinventing the state’s economy, but much bolder economic moves must be made if the march to 250,000 new jobs is to continue successfully. Thus, an incomplete grade.
Much more work remains on job creation for the fall session, regardless of whether the GOP stays in complete control or the Democrats take back the state senate.